Siddharth Varadarajan

On January 1, 2007, Romania will join the European Union along with Bulgaria. Very much part of `New Europe,' Romania is also one of Washington's closest allies, with troops in both Iraq and Afghanistan. In an interview toThe Hinduin Bucharest on the eve of an official visit to India, PresidentTraian Basescudiscusses how India can benefit from his country's accession to the EU. Excerpts:

Romania will soon become part of the EU, which is already India's largest trading partner. Is there something specific it can offer India as far the European market is concerned?

What Romania can offer is a partnership that is not only political we will be a friend of India inside the EU but also economic. Like India, our economy has seen very dynamic developments in the past six years. Secondly, Romania has a flat tax [on corporate income] of 16 per cent and this is one of the lowest in Europe. The World Bank has assessed Romania's business environment as one of the best. For instance, we are seventh [in the world] in terms of how fast one can open a business. Our workforce has very good qualifications and the country needs investment. This means Indian investors can look forward with trust towards relations with Romania. I would only add that any product produced in Romania as of January 1, 2007, will have the label, "Made in EU." For investors, this means the great advantage of not having to deal with border problems and formalities in Europe.

What are some of the specific issues on your agenda during your upcoming visit to India?

One issue is reform of the United Nations. Another would be the nuclear problems of the two countries. Also, how to increase bilateral trade relations. Of course, it would be of great interest for me to find out India's position on the situation in Afghanistan, Iraq, the Middle East, in general all security issues, and, of course, North Korea's nuclear test. The main point is strengthening bilateral ties. For us, India, China, and Japan are priority areas.

Romania is a member of the Nuclear Suppliers' Group. Has your government taken a view on the proposal to exempt India from some of the NSG's restrictions on civilian nuclear trade?

Romania's position has in view mostly a stronger and stronger engagement of India in relation to nuclear non-proliferation. And to this end, India can count on a favourable position from Romania with regard to developing nuclear energy.

Does Romania support the idea of expanding the number of permanent members of the U.N. Security Council?

We support the idea of reforming the U.N. and the SC as a key element of the U.N. We are aware that realities after World War II have changed considerably. At the same time, we would like Romania to preserve its right and frequency to be part of the SC as a non-permanent member. It is important that reform does not diminish the chances of smaller countries participating in the SC. Of course, we can also elaborate a solution that would increase the number of permanent members and non-permanent members. And we will support that group of countries which will not exclude Romania from participation.

Once Romania joins the EU, there will be a greater labour outflow as Romanian workers move to western Europe. Today itself, Romania has a labour-shortage economy. Under the circumstances, is there room for India, which is labour surplus, to develop a manpower relationship with Romania?

Romania will have a flexible attitude in terms of the access of foreign labour to its internal market. However, we feel this debate on worker outflow is a rather political debate. In reality, throughout the past five years, the emigration of workers mainly to Spain and Italy was very high and this generated a labour shortage. As a result, employers in Romania had to increase salaries. Today, salaries inside Romania compared to Europe in certain fields for example, construction, IT are attractive.

And we feel that right after accession, Romanian employers will have to increase salaries again. Thus, migration will not accelerate after January 1. This does not mean, however, that migration will not exist, or that it would not be stronger than it is today. This will make it possible for a labour force from other countries to come and work in Romania. We already have 2,500 workers from China in the textile industry. This is only the first contract. And it is for sure that other fields will need such workers.

The population of the U.S. just crossed the 300 million mark. Taking a long view, don't you feel the European Union needs to be more open to migration?

I fully agree with you. I believe the labour force policy of the EU will need to be more flexible.

Turning to energy, one of the projects you are promoting is an oil pipeline from the Romanian Black Sea port of Constanta to Trieste in Italy. This is being described by some as a transit route for Caspian crude which will not only bypass the Bosphorous but also Russia. Will the Constanta project not cause tension with Moscow?

No. We do not foresee any such issues. The project was solely Romanian but is now an EU project that we are participating in. A structure has been created in Brussels for big European and American companies dealing in crude oil in the Black Sea and Caspian region. These are companies that exploit the oil in Caspian and who are interested in this alternative transit route. Of course, the transit states are also interested. Our alternative is not a competitor to the Baku-Tbilisi-Ceyhan pipeline. Our pipeline is targeted at a region different from the BTC pipeline. It is aimed especially at consumers in central Europe and also Italy.

Romania has sent troops to Afghanistan and Iraq. Are you concerned the situation there is getting worse? Do you have an exit strategy?

Romania is not only a troop contributing country. We are also involved in the reconstruction process in Afghanistan and Iraq. I would not say that I am pessimistic. But it is certain that Romania will adapt its policy with regard to maintaining troops to that of its allies. For instance, this year we reduced our military participation in Iraq. Following consultations with our allies, we reached the conclusion that that particular region had been taken over by the Iraqi army. At the same time, we are increasing our participation in Afghanistan. It is easy to say, `I am leaving Iraq and Afghanistan.' The question is how to do that. We can either do that after fulfilling our mission, and that is the good way, or by abandoning the mission, and that is another way of leaving.

Romania is alleged to be one of the European countries where the CIA ran torture flights from, where illegal prisons were based. You have denied these allegations but the former Prime Minister, Adrian Nastase, says the Romanian government was never sure about what exactly the Americans were doing at the Mihail Kogalniceanu airbase.

I am convinced that there were no such prisons on Romania's territory, that no such prisoners were held. Right after The Washington Post published an article on this topic, Romania made available all its military bases for inspection by the specialists and journalists. There is nothing we have to hide.

Are you nevertheless concerned that some of these activities took place somewhere in Europe, and that they should be stopped?

It is rather difficult to make such statements. Airspace is something very difficult to control. We are aware that the airspace of Romania might have been used by airplanes that could have anything on board. At the end of the day, the information the respective authorities have is the one received from the commander of the aircraft. And it is important for European countries to not have violated their laws by establishing such prisons on their territory.